The Potential for Bitcoin’s Price to Surge to $70,000 Fueled by Institutional Investors
The release of the FOMC minutes by the Federal Reserve on Wednesday indicated a strong possibility of an upcoming interest rate cut, a development that is viewed favorably for Bitcoin and the entire cryptocurrency market.
The price of Bitcoin (BTC) has been striving to align with the bullish trend seen in Gold and traditional stock indexes. At the close of trading on Wednesday, August 21, the flagship coin was priced at approximately $61,000, suggesting a potential bullish upswing in the near future. However, both technically and fundamentally, Bitcoin continues to face challenges.
Historically, after the August 5 crash, Bitcoin’s price consistently closed below the 50 and 200 Moving Averages (MAs), indicating that bears are in control over the medium term. Additionally, for the first time since October of last year, the 50 and 200 daily Moving Averages have formed a death-cross. Nonetheless, the daily Relative Strength Index (RSI) has rebounded above the 50 percent level, indicating a potential shift in control from bears to bulls.
On the weekly time frame, Bitcoin’s price has been consolidating in an inverted triangular pattern, often suggestive of an imminent bullish continuation. However, if historical trends persist and Bitcoin’s price remains bearish throughout August and September, it could see a retracement back to $50,000 before experiencing an upturn leading to a new all-time high.
Conversely, if Bitcoin’s price consistently closes above $70,000 in the short term, the bearish sentiment could be invalidated.
Analysis from Coinglass reveals a consistent decrease in the supply of Bitcoin on centralized exchanges over the past year, with a net outflow of 6,000 Bitcoins in the last seven days alone. This decrease can be attributed to the increasing demand from spot BTC ETFs in the United States, with substantial contributions from BlackRock’s IBIT and Fidelity’s FBTC.
On-chain data analysis by Glassnode indicates that roughly 75 percent of all Bitcoins have not been moved in the past six months, signaling a noticeable shift from short-term holders to long-term investors. This, combined with the decline in Bitcoin’s supply on centralized exchanges, suggests a strong appetite from institutional investors for Bitcoin.
Expectations are high for Bitcoin’s price to pave the way for a forthcoming altseason. The recent approval of spot Ether ETFs in the United States and Spot Solana ETFs in Brazil has further increased the likelihood of an impending Altseason. In addition, BTC dominance has been forming a macro reversal pattern, following an upward trend over the past year.
Crypto analyst Benjamin Cowen believes that Bitcoin’s price action mirrors prior bull cycles, leading him to anticipate a robust bullish surge in the fourth quarter and into the next year.
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